Yelp Report Shows Local Businesses Slowly Recovering From Pandemic Lows

The U.S. economy is showing signs of recovery, with more than 230,000 local businesses reopening in late 2020, according to a new survey by Yelp.

Yelp’s Annual Economic Average (YEA) for 2020 showed that by the third quarter, food and restaurants were open at the same level as before the pandemic. Yelp attributed the rebound to their ability to adapt operations to a changed business environment.

The latter part of the year also saw more new openings. While restaurant and food business openings were down 16 percent for the full year over 2019, openings were off by only 4 percent in the fourth quarter. Openings were measured by the number of new businesses listed on Yelp, which are added by either business owners or Yelp users.

The results were an improvement over Yelp’s Local Economic Impact Report, which was released in September 2020. That report found that the number of business closures had continued to climb into August.

The new YEA survey found openings for home services and professional services businesses also increased in 2020, as Americans spent more time at home. While openings dropped during the height of the lockdowns in April, openings for home services businesses increased 7 percent in 2020 while those for professional services rose 4 percent over the previous year.

“After a challenging year that’s tested millions of local businesses, our data shows early signs that local economies may finally be on the mend,” said Justin Norman, Yelp’s vice president of data science, in a statement. “As a testament to their resilience many months into the pandemic, we saw numerous industries return to pre-pandemic rates of new openings, as well as restaurants lead in re-openings during the fourth quarter of 2020.”

Norman added, “As people spent more time at home, businesses in the home, local, professional and auto services, at times, opened more new businesses than prior years, and all ended the year with a higher number of new openings in December than years prior.”

One sector that continues to suffer is retail. The Yelp survey showed retail openings were down 25 percent in 2020 compared with 2019. October saw the highest number of openings since February, but activity slowed again in November and December.